Nuclear industry claims it is now 'sexy' but admits to rising costs

Widespread doubts about the ability of nuclear power companies to bring a new generation of reactors on stream at the right time and on budget were raised yesterday within an industry that the UK government is relying on to meet its climate change and energy security goals.

EDF, the French power company that has positioned itself as a leading player in the market, admitted that its new European Pressurised Reactor programme at Flamanville in France was already 20% over budget, while delays continue to plague a Finnish facility, the only other new plant under construction in Europe.

Paul Golby, chief executive of E.ON UK, which also wants to build two nuclear facilities in Britain, said the 2017 target for a first new UK reactor was "extremely ambitious" and urged ministers to proceed with a new generation of coal plants, such as the controversial Kingsnorth scheme, to fill the growing energy gap.

He was talking at a London conference organised by the Nuclear Industries Association, which was told by another top industry figure that although the sector might have a range of problems to overcome, it had recently achieved an extraordinary transformation and was now perceived externally as "sexy".

Lady Barbara Judge, chairwoman of the Atomic Energy Authority, highlighted skills shortages and waste disposal as difficulties but felt they could be overcome. "Atomic was a dirty word but now it's certainly a sexy one," she said.

But she did warn that the safety of existing plants remained paramount and, while the difficulties for the industry caused by the Chernobyl disaster and Three Mile Island accident had been overcome, they could return. "Everyone knows just one accident [need occur] and the industry will be shut down for 20 years," she said.

Golby raised concerns about the shortage of experts at the Nuclear Installations Inspectorate, which governs health and safety, and questioned whether 2017 was a realistic date for a new station. A colleague had suggested that atomic power would be available to cook the Christmas dinner that year but he said: "I have a fear it will be humble pie we will be eating rather than turkey."

Meanwhile, at an investors' day in Paris, EDF said the reactor being built in Flamanville would cost €4bn (£3.5bn) at 2008 prices instead of €3.3bn, blaming "higher raw material costs and the impact of technical and regulatory evolutions".

The new total cost of the electricity generated is €54 a megawatt hour, instead of the €46 announced in 2006.

Luc Oursel, president of Areva NP, said despite Flamanville's problems and rising costs and delays at the Olkiluoto site in Finland, nuclear still made commercial sense. He said the lessons learned would help build plants in Britain on schedule.